Corby v State of New South Wales

Coyle v State of New South Wales [2006] NSWCA 95 Fatimi Pty Ltd v Bryant [2004] NSWCA 140 CASES CITED: Lamb v Cotogno [1987] HCA 47 New South Wales v Ibbett [2006] HCA 57 New South Wales v Riley [2003] NSWCA 208 State of New South Wales v Ibbett [2005] NSWCA 445

PARTIES: Gregory Edward CORBY State of New South Wales

COUNSEL: A Blackman for the Plaintiff P Saidi for the Defendant

SOLICITORS: Aitken MacDonald for the Plaintiff NSW Crown Solicitor's Office for the Defendant

1 Mr Corby (the plaintiff) alleges that, in February 2006 while he was in custody at the Wagga Wagga Police Station, he was assaulted by a police officer and by officers of the Department of Corrective Services. He seeks aggravated and exemplary damages.

2 The State of New South Wales (the State) accepts vicarious liability for the actions of the alleged assailants.

3 The state applies to strike out the plaintiff's claim for aggravated and exemplary damages, relying on the 2008 amendments to the Civil Liability Act 2002 (the Act).

4 If a person not in custody claims damages for assault, the Act generally does not apply. Damages are determined according to the common law. Section 3B of the Act provides: "3B (1) The provisions of this Act do not apply to or in respect of civil liability (and awards of damages in those proceedings) as follows: (a) civil liability of a person in respect of an intentional act that is done by the person with intent to cause injury … - the whole Act except: (iii) Part 2A (Special provisions for offenders in custody)" (emphasis added)

5 In State of New South Wales v Ibbett [2005] NSWCA 445 the Court of Appeal determined that the word "injury" where it is used in s 3B(1)(a) (but not necessarily where it is used elsewhere in the Act), encompasses the harm occasioned by an apprehension of physical violence, as in the case of an assault (Spigelman CJ at [5], Ipp JA at [124], Basten JA considering but not deciding at [218]).

6 Section 3B(1)(a)(iii) was introduced by the Civil Liability Legislation Amendment Act 2008 (the Amendment Act). The Amendment Act applies retrospectively to the proceedings. The plaintiff's claim is to be determined on the basis that he is an "offender in custody" within Part 2A of the Act. Part 2A comprises sections 26A to 26D. Section 26C provides: "No damages may be awarded (whether for economic or non-economic loss) unless the injury results in the death of the offender or in a degree of permanent impairment of the offender that is at least 15%."

7 In relation to s 26C, the plaintiff's solicitors put the plaintiff's position as follows: "We concede that the injuries (sustained in the assault) did not result in the death of (the plaintiff) or in a degree of permanent impairment which is least 15%.

Our client will make no claim for (a) pain and suffering, (b) loss of amenities of life, (c) loss of expectation of life, (d) disfigurement, (e) economic loss Our client will (pursue) his claim for exemplary and aggravated damages."

8 The State asserts that Part 2A and s 26C apply to a claim for aggravated and exemplary damages arising from an assault on an offender in custody. The State seeks to strike out the offender's claim on the basis that he cannot recover aggravated and exemplary damages because he cannot meet the15% permanent impairment threshold set by s 26C.

9 The issues are: (1) Whether Part 2A applies to a claim for aggravated or exemplary damages arising from an assault on an offender in custody.

(2) If so, whether s 26C precludes the recovery of aggravated or exemplary damages in circumstances where the 15% threshold is not met.

10 The Amendment Act both extended s 3B(1)(a) by adding part (iii) (see [4] above) and extended s 26B as indicated by the following emphasis: "Section 26B Application of Part (2A) (1) This Part applies to and in respect of an award of personal injury damages against a protected defendant in respect of: (a) an injury to a person received while the person was an offender in custody, or (b) … , being an injury caused by the negligence (that is, the failure to exercise reasonable care and skill) of the protected defendant or caused by the tort (whether or not negligence) of another person for whose tort the protected defendant is vicariously liable." (emphasis added).

11 Prior to the 2008 amendments, if an offender in custody made a claim in assault, then pursuant to s 3B, the claim was exempt from application of the Act. Consistent with s 3B as it then was, s 26B confined the operation of Part 2A to actions in negligence. If an offender in custody brought a claim in negligence, he or she had to satisfy the s 26C 15% threshold in order to recover both economic and non-economic loss. Compared to a person not in custody, an offender in custody was disadvantaged because, for person not in custody, the 15% threshold applied only to a claim for non-economic loss.

12 In the Second Reading Speech for the Amendment Act, the Attorney General stated: "The bill prevents offenders from circumventing the provisions of the Civil Liability Act by specifying that Part 2A -- the special provisions for offenders in custody -- extends to a claim for an intentional tort for which the protected defendant is vicariously liable. As the Civil Liability Act does not generally cover intentional torts, some inmates have sought to avoid the operation of the Civil Liability Act by pleading their claim in intentional tort and therefore seeking to have it dealt with at common law. These amendments close that loophole."

13 In other words, the Amendment Act was designed to ensure that, in circumstances where a claim may be pleaded either in negligence or as an intentional tort, an offender in custody confronts the 15% threshold regardless of the manner in which the claim is framed.

14 The Attorney General's statement that the Act "does not generally cover intentional torts" is noteworthy. It is also worth noting that aggravated and exemplary damages are often sought in claims for intentional torts.

15 The purpose of the Amendment Act was to close a "loophole" that had nothing to do with aggravated or exemplary damages. Had the legislature intended that the amendments limit an offender in custody's right to claim aggravated and exemplary damages, the Amendment Act would have expressly done so.

16 Section 26B defines the matters to which Part 2A applies, providing that Part 2A applies "to and in respect of an award of personal injury damages … in respect of … an injury to a person" (emphasis added).

17 Pursuant to s 26A: "'injury' means personal injury and includes the following: (a) impairment of a person's physical or mental condition, (b) disease.

'personal injury damages' means damages that relate to the death of or injury to a person."

18 The definition of "personal injury" applicable to Part 1A of the Act is provided in s 5 of the Act. The definition of "injury" applicable to Part 2 of the Act is provided s 11 of the Act. The s 5 definition of "personal injury" is identical to the s 11 definition of "injury". Both definitions are identical to the s 26A definition of "injury", except that, in addition to impairment and disease, the s 5 and s 11 definitions refer to pre-natal injury.

19 In State of New South Wales v Ibbett [2005] NSWCA 445, two members of the Court of Appeal considered, but did not decide, whether proceedings for assault brought by a person not in custody were "an action for the award of personal injury damages" within s 21 of the Act. Section 21 is contained in Part 2 of the Act. At [21], Spigelman CJ stated that the expression "personal injury" has rarely, if ever, been used to refer to injured feelings such as outrage, humiliation, indignity and insult or to mental suffering such as grief, anxiety and distress, not involving a recognized psychological condition. He inclined to the view that an award for the emotional harm involved in the apprehension of personal violence was not an award for "personal injury damages". At [216], Basten JA took a different approach, observing that, as the focus of s 21 is on damages for negligence, the term "personal injury damages" is probably intended to include any damages that may properly be awarded in negligence proceedings, other than damages for injury to property.

20 Given the s 26A definition of "personal injury damages" ("damages that relate to … injury to a person") and the coincidence between the definitions of "personal injury" and "injury" in Parts 1A, 2 and 2A, the expression "personal injury damages" in s 26B adds little, if anything. Section 26B might as well refer only to an award of damages "in respect of an injury to a person". Similarly, in the s 26A definition of "injury", the reference to "personal injury" adds nothing.

21 In Ibbett at [22], Spigelman CJ inclined to the view that the emotional reaction often called "injured feelings", arising from the apprehension of physical violence and the accompanying sense of outrage or indignation, was not an "impairment of a mental condition" and thereby an "injury" within the meaning of Part 2 of the Act. At [211] - [216], Basten JA opined that "impairment of a mental condition" was a broad concept. He doubted that it was limited to impairment involving a recognized psychiatric illness.

22 "Impairment of a mental condition" may cover injury to feelings beyond a recognized psychiatric condition. However, there must be some "impairment" in the sense that there is a loss of normal function or a departure from ordinary mental functioning. If provoked by an assault, feelings such as anger, outrage, injured pride, humiliation and fear do not reflect any "impairment" of a victim's mental condition. Although unpleasant, such feelings are an ordinary and appropriate reaction to an assault.

23 The s 26A definition of "injury" is inclusive. It is necessary to consider whether aggravated and exemplary damages address "injuries" of the same general character as those to which the definition of "injury" specifically refers.

24 Exemplary damages are one means by which courts may uphold and vindicate the rule of law: New South Wales v Ibbett [2006] HCA 57 at [38] - [40]. Exemplary damages are assessed by reference to a defendant's conduct. They may be awarded in cases of conscious wrongdoing or high-handed conduct in disregard of a plaintiff's rights. An award of exemplary damages may satisfy purposes of denunciation, punishment and/or general deterrence: New South Wales v Riley [2003] NSWCA 208.

25 Exemplary damages address social issues, not "injury to a person". They are not even "damages" within the meaning of s 3 because they are not awarded by way of "compensation" (see [34] below).

26 Aggravated damages are compensatory in nature, being awarded for injury to the plaintiff's feelings caused by insult, humiliation and the like: Lamb v Cotogno [1987] HCA 47 at [19] (164 CLR 1, at 8). In determining whether and to what extent to award aggravated damages, an important consideration is the degree to which the defendant's conduct departed from acceptable standards: New South Wales v Rileyper Hodgson JA at [133] and [142]. Matters relevant to an assessment of exemplary damages are also relevant to an assessment of aggravated damages, the difference being that aggravated damages are assessed from a plaintiff's point of view whereas exemplary damages are assessed from a defendant's point of view: Ibbett per Spigelman CJ at [85], approved by the High Court in New South Wales v Ibbett [2006] HCA 57 at [34].

27 Although aggravated damages are compensatory, they are assessed not only by reference to a plaintiff's reaction, but also by reference to a defendant's conduct. As aggravated damages are not wholly determined by reference to a plaintiff's condition, they are not damages of the same character as those to which the s 26A definition of "injury" makes reference.

28 It follows that claims for aggravated and exemplary damages for assault are not claims in respect of an "injury", are not claims "in respect of an award of damages for personal injury", and are not claims to which Part 2A applies.

29 The State contends that s 26C precludes the recovery of aggravated and exemplary damages in circumstances where the 15% permanent impairment threshold is not met.

30 First, the State argues that exemplary damages are "parasitic" in that they can only be awarded if there is an award of compensatory damages. As compensatory damages can only be awarded on satisfaction of the 15% permanent impairment threshold, the practical effect is that the 15% threshold applies to exemplary damages.

31 Exemplary damages are "parasitic" on compensatory damages only where proof of loss is an ingredient of the plaintiff's cause of action. A cause of action in negligence requires proof of loss, but a claim in assault (trespass to the person) does not: Fatimi Pty Ltd v Bryant [2004] NSWCA 140 at [41] and [71]; Coyle v State of New South Wales [2006] NSWCA 95 at [1], [2] and [94] - [97].

32 Second, the State notes that s 26C refers to "damages". It is not confined to "personal injury damages". Section 3 of the Act contains definitions that are relevant throughout the Act. It provides: "'damages' includes any form of monetary compensation …" (emphasis added).

33 I accept the State's submission that "damages" includes aggravated damages, which are a "form of monetary compensation".

34 Exemplary damages are not a "form of monetary compensation". The definition of "damages" does employ the word "includes". Nevertheless, in my view the definition of "damages" does not extend to exemplary damages because they are quite different from compensatory damages.

35 Section 26C refers to the circumstances in which "no damages may be awarded (whether for economic or non-economic loss) …" (emphasis added).

36 The Act does not define "economic loss". Part 2A Division 3 is entitled "Damages for economic loss". It refers to loss of earnings and to the deprivation and impairment of earning capacity, adopting the meaning that courts generally ascribe to the expression "economic loss". Neither aggravated nor exemplary damages provide compensation for economic loss.

37 For the purposes of the Act generally, s 3 defines 'non-economic loss' as follows:

"non-economic loss means any one or more of the following: (a) pain and suffering, (b) loss of amenities of life, (c) loss of expectation of life, (d) disfigurement."

38 The definition of non-economic loss is exclusive. Only on a very broad interpretation could "pain and suffering" cover the sort of "injured feelings" for which aggravated damages provide compensation.

39 Section 26C is concerned with economic and non-economic loss and with degrees of "permanent impairment". Aggravated and exemplary damages compensate neither economic nor non-economic loss. Consequently, such damages are not caught by s26C.

40 Further, s 26C refers to "a degree of permanent impairment of the offender that is at least 15%". The concept of "permanent impairment" has little, if any, relevance to the type of injured feelings that are compensated by aggravated damages. First, the "injury to feelings" is, almost invariably, temporary. Second, for the reasons stated in [22] above, the "injured feelings" for which aggravated damages provide compensation are not "impairment". The concept of "permanent impairment" of a person has no relevance to the subject matter of exemplary damages.

41 The above views are reinforced by a consideration of s 21 of the Act. Subject to Part 2A, Part 2 of the Act - including s 21 - applies to an award of damages to which Part 2A applies: s 11A(4). Section 21 is the only provision of the Act in which aggravated and exemplary damages are mentioned expressly.

42 Section 21 provides: "In an action for the award of personal injury damages where the act or omission that caused the injury or death was negligence, a court cannot award exemplary or punitive damages or damages in the nature of aggravated damages."

43 In relation to negligent conduct, both offenders in custody and persons not in custody are precluded from recovering aggravated and exemplary damages. Had the legislature intended to differentiate between the two by preventing offenders in custody from recovering aggravated or exemplary damages for intentional torts, it would have done so by an amendment to s 21 or Part 2A.

44 Part 2A does not apply to a claim for aggravated or exemplary damages arising from an assault on an offender in custody, because: (1) Part 2A applies to an award of damages "for injury to a person". The type of injured feelings for which aggravated damages compensate are not an "injury" within the meaning of Part 2A because they are neither an "impairment of a mental condition" nor otherwise an injury of the type that falls within Part 2A. (2) Exemplary damages are not compensatory. Consequently, they are not "damages" within the meaning of the Act. Further, they are not damages "for injury to a person" because they address the conduct of a tortfeasor, rather than the impact of that conduct on an injured person. (3) The purpose of the Amendment Act was to close a "loophole" that had nothing to do with aggravated or exemplary damages. Had the legislature intended that the amendments limit the right of an offender in custody to claim aggravated and exemplary damages, the Amendment Act would have expressly done so.

45 In any event, s 26C does not preclude the recovery of aggravated or exemplary damages in circumstances where the 15% threshold is not met, because: (1) Exemplary damages are not "damages" within the meaning of s 3 and s 26A of the Act because they are not of the same character as damages that involve monetary compensation. (2) As aggravated and exemplary damages address neither economic nor non-economic loss within the meaning of s 26C, they are not caught by that provision.

(3) The s 26C concept of "permanent impairment" has no relevance to the type of injured feelings that are compensated by aggravated damages and no relevance to the subject matter of exemplary damages. (4) This interpretation is consistent with s 21 of the Act.

46 The application to strike out the claim is refused.

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